Dollar mixed in early trade

Traders feel for the bottom

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NEW YORK (CNNMoney.com) -- The dollar was mixed against European currencies Tuesday, while remaining strong against the yen, as investors gear up for key economic data and remarks from Federal Reserve chairman Ben Bernanke and President Obama.

The euro traded at $1.2736, up 0.3% from $1.2699 late Monday in New York, and the pound was essentially flat at $1.4482.

Against the yen, the dollar rose 1.3% to ¥95.80, amid concerns about the health of the Japanese economy.

Kathy Lien, director of currency research at Global Forex Trading, said the market is showing sings of a "relief rally" after heavy dollar buying in the previous session.

"We had a tremendous bout of risk aversion yesterday because the Dow fell to its lowest level in 11 years," Lien said. "I think the theme today seems to be recovery."

On Wall Street, meanwhile, stock futures were signaling a higher open after the Dow and S&P indexes fell on Monday to their lowest levels since 1997.

Stocks have been battered in recent weeks as investors doubt the government's ability to quell the financial crisis and lift the economy out of recession.

Turmoil in the broader market often boosts the dollar, since many investors view the greenback as a safer alternative to more risky bets in the stock market.

In Europe, stock prices were lower in afternoon trade, following steep declines Asia, as shares of financial institutions continued to plummet.

While the market appears set for a positive open, the sentiment could change depending on how the market responds to the day's economic data and comments from Bernanke and Obama.

Bernanke is expected to comment on the nation's economic challenges when he testifies before the Senate Banking Committee at 10 a.m. ET. Later Monday, Obama will discuss the economy in a televised speech to lawmakers and the nation at 9 p.m. ET.

Investors will also pay close attention to reports on the housing market and consumer confidence.

The S&P/CaseShiller national home price index fell a record 18.2% in the fourth quarter of last year, in a report issued Tuesday.

Separately, the Conference Board will release its Consumer Confidence Index for February after the market opens. It is expected to have fallen to a reading of 36 from 37.7 in January, marking the lowest level since the Conference Board began tracking the index in 1967.